Greetings from Venice, Italy. Wow…quite the amazing place. In the past 2 weeks, my family and I have traveled to Barcelona, Naples, Rome, Florence and the Amalfi Coast. Having a blast. You must…you must…you must visit these great cities. Finishing the trip off in London before coming back home.

Lots going on since I have been gone…just continues to be the mother of all news-driven markets. Taxes, debt, Italy, Greece and on and on. It never stops. One would think the DOW would be at 7,000 by now with all the “bad news” that is out there. The fact that the major averages were just near recent highs amazes me.

We head into a big earning’s season next week so pay attention. Before I left, my last few reports were becoming more positive. This was based on long-term moving averages and support holding. On top of this, I liked that many growth leaders were turning up. So while long-term support held, the top of the range is acting as a strong ceiling. The main reason major averages can’t break out is that there remains too many areas in poor shape…that if not resolved to the better, should come back to haunt the market.

I am worried about the SEMIS. They are imploding again as the SOX could only rally back up into the 50 day. They were smoked in past days on worsening outlooks. Those that know me know that I put major importance on this group.

I continue to be worried about the FINANCIALS. I must repeat…THEY CONTINUE TO ACT LIKE IT IS 07 ALL OVER AGAIN. In fact, many important big names are near or at recent lows…some yearly lows. This is very important and bears watching. Just take a gander at MS ,GS, BAC, BK, WFC, JPM and many others.

I am worried about many countries around the world not only lagging but breaking down…some badly. Take a look at the charts of ETFs like FXI, EWZ, EWG ,EWH representing places like CHINA,BRAZIL,GERMANY and HONG KONG. Many others look the same.

I do not like that I have seen in recent days many failed breakouts.

I am not thrilled that the S&P is back below the 50 day. I am not thrilled that we are already seeing higher volume selling in the market.

To recap, long term support held…but a move back into recent highs was smacked down. There remains very worrisome underneath-the-surface action while all this is going on. This remains the toughest of all markets. A market that gaps up one day and gaps down the next day. A market that is still in a trading range that goes back 6-7 months. A market that simply drives many up a wall. Should be quite an interesting earning’s season.


Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.